ASEAN To Implement New Set Of Tariff Codes on January 1, 2012

By
CFO Innovation Asia Staff |
Monday, December 05, 2011 - 09:57

The Customs administrations of the ASEAN member countries will be implementing a new set of tariff codes for the classification of all goods traded within and outside ASEAN from next year.

The ASEAN Harmonised Tariff Nomenclature (AHTN) 2012 is a common tariff classification system of ASEAN, based on the latest version of the Harmonised Commodity Description and Coding System (HS) developed by the World Customs Organization (WCO).

The WCO HS is used by more than 200 Customs administrations to classify international trade.

The AHTN is an initiative by ASEAN member countries to provide a transparent and uniform goods classification system to facilitate trade in ASEAN. This marks an important step towards the realisation of the ASEAN Economic Community by 2015.

The harmonised tariff nomenclature can be likened to a “trade dictionary” used by traders and ASEAN Customs administrations to classify traded goods.

All goods are identified by a unique eight-digit code, with the tariff rates tagged to them by individual ASEAN member countries. For instance in Singapore, mineral water, identified by the tariff code 22011000, is non-dutiable, while sparkling wine, identified by the tariff code 22041000, is dutiable.

With the adoption of a common tariff nomenclature in ASEAN, traders benefit from a unified and consistent way of classifying goods.

For example, the tariff code used by a Singapore trader to classify a product being exported will be the same as that used by his buyer in another ASEAN member country to make the import declaration. This makes it easier and more transparent for traders to determine the applicable import tariffs imposed by different ASEAN member countries.

From the tariff classification codes, traders will also be able to determine whether the goods are eligible for preferential tariffs under the different free trade agreements (FTAs).

Shell, one of Singapore’s largest multinational companies with significant international trading activities, currently maintains the tariff numbers of thousands of products, across all countries that Shell trades with.

“By promoting uniformity and simplification of the tariff nomenclature system across ASEAN countries, we have seen an increase in efficiency and productivity in the tariff number maintenance process for Shell,” says Chan Suit Fong, Finance Director of Shell Eastern Petroleum (Pte) Ltd.

“For example, the AHTN has enabled the tariff number maintained for one country to be mapped to the rest of the ASEAN countries. The enhanced transparency in the classification of oil and petrochemical products across ASEAN countries will help facilitate trade in the region.”

At the national and regional levels, the AHTN serves as the basis for negotiations on FTAs and Customs treaties, as well as the collection of trade statistics. It is also used by Customs administrations to monitor the movement of goods, for purposes such as food security, public health, environmental protection and counter-terrorism.